Wednesday’s Market Prepper

Wednesday's Market Prepper







Fed up with waiting? An interest rate hike is likely on the menu this afternoon, and if market expectations are correct, the central bank will raise its benchmark rate by a quarter percentage point. Investors will still be watching the post-meeting statement and press conference for clarity with respect to future hikes and what concerns remain on the Fed's radar. Policymakers penciled in three such moves when they met in December.


Dutch voters are heading to the polls as investors contemplate what the general election could mean for their portfolios and currencies. Current surveys suggest that incumbent Prime Minister Mark Rutte is marginally ahead, buoyed by recent support following a diplomatic row with Turkey, but Geert Wilders, leader of the far-right Freedom Party, is close behind. The election is seen as especially significant this year in indicating populist sentiment across Europe.

"It would be impossible for people in the timescale suggested by Nicola Sturgeon to make a reasoned view and, therefore, have a legal, fair and decisive referendum," UK's Scotland Minister told the Herald Report. "There is no option for Scotland to remain in the EU as the UK leaves or for Scotland to inherit the UK's place." Sturgeon has said a referendum should be held in late 2018 or early 2019.

At this week's gathering of the group's financial leaders, Germany will press G20 members to sign off on a set of principles including free trade in a document separate from the main communique. The unusual move would allow Germany to clarify its priorities without them being overshadowed by what could be a more heated debate on protectionism and currency policy.

"China does not want to escalate a trade war with the U.S," Premier Li Keqiang told a news conference at the closing of the National People's Congress. "That wouldn't make our trade fairer, and that hurts both economies. China hopes that no matter what bumps this relationship may run into, we hope this relationship will continue to forge in the right direction."

Saudi Arabia claimed "a historic turning point" in U.S. relations after President Trump on Tuesday welcomed Deputy Crown Prince Mohammed bin Salman to the White House. The "meeting put things on the right track... across all political, military, security and economic fields," said an adviser to the Prince, adding that Saudi Arabia doesn't view Trump's travel ban as aimed against Muslim countries or Islam.

In its latest monthly report, the IEA cautioned that the market was still dealing with a vast amount of past supply, but added the compliance rate from OPEC's production cuts averaged 98% during the first two months of the deal. While oil demand is expected to drop from 1.6M bpd last year to 1.4M bpd in 2017, crude futures are up 1.7% to $48.54/bbl, as API data showed a surprise drawdown in U.S. crude stockpiles.


DOJ officials are expected to announce indictments today against suspects in at least one of a series of hacking attacks on Yahoo (NASDAQ:YHOO), which disrupted the company's sale to Verizon (NYSE:VZ). The four accused men live in Russia and Canada, according to Bloomberg, with the Canadian far more likely to face arrest, as Russia has no extradition treaty with the U.S.

To understand Intel's $15.3B proposed acquisition of Mobileye (NYSE:MBLY), imagine the data created and compiled by a self-driving car scanning the road and objects around it as a potential source of revenue. That information, said Intel (NASDAQ:INTC) CEO Brian Krzanich, is the key to the deal, and may see its first tangible revenue stream through mapping technology.

A seven-month investigation by Russia's Federal Antimonopoly Service has found that Apple's (NASDAQ:AAPL) Russian arm illegally fixed prices for its iPhone 5 and 6 models. A penalty has not been set, though it could be as much as 15% of Apple's sales in Russia.

Hundreds of Twitter accounts, from media outlets to celebrities, were hacked overnight. Tweets (NYSE:TWTR) listed support for President Erdogan in his feud with Germany and the Netherlands, with hashtags reading "NaziGermany" and "NaziHolland." Some also mentioned the date April 16, when Turkey will hold a referendum seeking to give more power to the President.

Toshiba nosedived another 12% after the Tokyo Stock Exchange placed the troubled conglomerate under "Security Under Supervision," the next regulatory step to a potential delisting. CEO Satoshi Tsunakawa sidestepped questions about a potential Chapter 11 filing for Toshiba's (OTCPK:TOSYY) Westinghouse unit on Tuesday, but sources say bankruptcy lawyers have been hired as an exploratory step.

The British government has reduced its stake in Lloyds (NYSE:LYG) to just below 3%, putting the lender on track to be back in private ownership within the next few months. The U.K. was left with a 43% stake in the bank after a £20.5B taxpayer-funded bailout during the 2007-09 financial crisis, but it started reducing its holdings in September 2013.

Billions are at stake for ABC News (NYSE:DIS) as a South Dakota case is headed to a jury trial over a story on beef production. The suit claims ABC's coverage of "pink slime" - a term applied to a lean-beef product from Beef Products Inc. - caused $1.9B in damage to the company's business. That amount could be tripled due to a state law covering those who knowingly lie about food safety.

Airline stocks weren't the only ones hit by Tuesday's snow. The trucking industry will be hurt the most, Avondale Partners' Don Broughton told CNBC, stating trucks have the "lowest asset utilization" in unfortunate weather scenarios like a blizzard. What about the rest of the sector? The rail industry won't be impacted quite as severely but it will be to an extent, he said, followed by air freight carriers.

More car trouble... Shares of Renault (OTCPK:RNLSY) are down 3% in France after a report from Liberation accused the carmaker of cheating customers on emissions levels in its diesel engines. Meanwhile, Audi (OTCPK:AUDVF) just announced that prosecutors are searching its premises in Germany. The auto brand, which is a subsidiary of Volkswagen (OTCPK:VLKAY), said it's in relation to the wider Dieselgate scandal.

U.S. airlines that rushed into Cuba last year knew the going would be tough, but it's turned out to be such a financial slog that Frontier Airlines and Silver Airways just quit the island. Earlier this year, American Airlines (NASDAQ:AAL) cut daily service by 25%, while JetBlue (NASDAQ:JBLU) has announced it will use smaller planes on several routes to match lower-than-expected demand.

A relative newcomer to military space launches, SpaceX (Private:SPACE) has won another $96.5M contract to support the launch of a next generation global positioning system satellite called GPS III. The development marks another victory in the company's campaign to snare business away from its dominant rival, United Launch Alliance, a joint venture between Boeing (NYSE:BA) and Lockheed Martin (NYSE:LMT).

Secretary of State Tillerson, while CEO of Exxon Mobil (NYSE:XOM), used an alias for emails with employees and board members because his primary account was jammed with too many messages. "This was not an alias used to discuss only climate change," said Exxon spokesman Alan Jeffers. He received thousands of emails a day at his regular address making it difficult to parse which messages were important.

Such a move would be against the public interest, said U.S. District Judge James Boasberg, denying a request by the Standing Rock Sioux tribe to issue an emergency injunction against the Dakota Access Pipeline. Following months of demonstrations, oil will begin flowing through the pipeline next week, after President Trump signed an executive order smoothing the path for its completion. Related tickers: ETP, ETE, SXL, PSX, MPC, ENB, EEP

Today's Markets
In Asia, Japan -0.2%. Hong Kong -0.2%. China +0.1%. India -0.2%.
In Europe, at midday, London +0.2%. Paris flat. Frankfurt flat.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +1.7% to $48.54. Gold -0.1% to $1200.90.
Ten-year Treasury Yield flat at 2.59%

Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
8:30 Retail Sales
8:30 Empire State Mfg Survey
10:00 Business Inventories
10:00 NAHB Housing Market Index
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:00 PM FOMC Forecast
2:00 PM Chairman Press Conference
4:00 PM Treasury International Capital

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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